While Mark is correct on the culinary aspects, the fungal effects and the medicinal effects are from the extract of cinnamaldehyde from several Cinnamomum species including the edible ones. I don't have the paper with me and cannot relocate it on google, but it has proven effective on several fungal problems and works by keeping the conidiophores dormant or killing them. There is plenty of imformation and numerous studies performed on antifungal and medicinal uses of Cinnamomum.
As far as medicine, it a has been used in Ayurveda for a long time. It has also been shown in clinical trials to reduce blood sugar in diabetics by 18-29%.
"Folk" and "newage" medicines after all come from ethnobotany and modern medicine also takes a large amount of information from ethnobotany, but they differ in that the former two do not use the synthetically derived chemical constituents while the latter isolates only the active compound. The former two also tend to focus on dietary problems that lead to ill health while the latter focuses directly on curing (sometimes only covering) the symptom. Both sides have their faults, but why limit oneself, or be so one-sided.
Aaron Floden